Tax Deferral for Manufacturing

The Ministry of Finance and the State Administration of Taxation jointly released the Announcement [2022] no. 2 on “Relevant Matters concerning Extending the Deferral of Some Taxes for Medium, Small and Micro Manufacturing Enterprises”, effective from the date of issuance.


The Announcement clarifies that, the deferral of some taxes for medium, small, and micro manufacturing enterprises for the fourth quarter of 2021 will be extended, and some taxes may be deferred in the first and second quarters of 2022. According to the Announcement, the policy for the deferral of some taxes for medium, small, and micro manufacturing enterprises for the fourth quarter of 2021, as introduced in the Announcement on “Relevant Matters concerning the Deferral of Some Taxes for Medium, Small and Micro Manufacturing Enterprises for the Fourth Quarter of 2021”, will be extended for six months. The Announcement stipulates that, of the medium, small and micro manufacturing enterprises that meet the conditions as specified in the Announcement, medium-sized manufacturing enterprises may defer 50 percent while small and micro manufacturing enterprises may fully defer all taxes specified in the Announcement, after filing their tax returns in accordance with the law, and the term of such deferral will be six months.


According to the Notice of the National Bureau of Statistics on the “Latest Measures for the Classification of Enterprises into Micro, Small, Medium and Large-sized ones for Statistical Purposes” (2017), an enterprise is classified in one of the categories based on the industry, the number of employees and the yearly turnover. For enterprises engaged in the manufacturing business, the thresholds to be classified as SME are:

  • Number of employees lower than 1,000 persons; and

  • Annual turnover lower than RMB 400 million.


Source: http://www.chinatax.gov.cn/chinatax/n810341/n810825/c101434/c5173058/content.html



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